Simply put a Life Insurance policy is paid up when according to contract you no longer have to pay on a policy to maintain the face amount. A 20 Pay Whole Life, $25000 policy for example would be paid up in 20 years for the full face amount. A term insurance policy does not have this feature so don't be confused by a 20 year TERM policy. You also have reduced paid up options in a Whole Life contract by using the cash value to purchase a reduced face amount.
Co-Founder, Coastal Financial Partners Group, California
In the context of whole life insurance and in simplest terms, it means no further premiums are due. Some whole life policies are designed to be paid up at a relatively early duration e.g. Policy Year 20, Age 65, etc. The premiums for these policies are relatively high as a result. In comparison, in most cases, whole life policies are designed to have required premiums to age 95 or 100 or later. Such policies have relatively low premiums.
It is important to note that policies which use policy dividends and/or the cash value of Paid Up Additions to offset the required premiums due at some future point are not "paid up".
A paid up life insurance policy is one that requires no more premiums for it to remain in effect. In essence, you have paid enough premiums that, left untouched, your policy will stay in effect for the rest of your life.
Some people want to quit paying premiums before the policy is paid up, and choose to settle for a "reduced" paid up amount of insurance. The same thing happens, the policy will stay in effect with no further premiums paid. But the face amount of the policy will be less than what it was originally.
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It is important to note that policies which use policy dividends and/or the cash value of Paid Up Additions to offset the required premiums due at some future point are not "paid up".
Some people want to quit paying premiums before the policy is paid up, and choose to settle for a "reduced" paid up amount of insurance. The same thing happens, the policy will stay in effect with no further premiums paid. But the face amount of the policy will be less than what it was originally.